IT : 'Deemed registration' to trust as CIT didn’t pursue request
even after 6 months from date of ITAT’s order
■■■
[2013] 38 taxmann.com 309 (Lucknow - Trib.)
IN THE ITAT LUCKNOW BENCH 'A'
Harshit Foundation
v.
Commissioner of Income-tax*
S.K. YADAV, JUDICIAL MEMBER
AND PRAMOD KUMAR, ACCOUNTANT MEMBER
IT APPEAL NOS. 104 & 105 (LUCK.) OF
2012
JUNE 28, 2013
Section 12AA of the
Income-tax Act, 1961 - Charitable or religious trust - Registration procedure
[Deemed registration] - Whether where Commissioner does not pass any orders
even after six months from receipt of Tribunal's order remitting matter of
registration under section 12AA to him, registration will be deemed to have
been granted - Held, yes [Para 5] [In favour of assessee]
CASE
REVIEW
Society for the
Promotion of Education, Adventure, Sport & Conservation of Environment v. CIT [2008] 171 Taxman 113 (All.) (para
5) followed.
CASES
REFERRED TO
Abhinav Mehrotra for the Appellant. Alok
Mitra for the Respondent.
ORDER
Pramod Kumar, Accountant
Member - ITA No.
104/Luck/2012 : By way of this appeal, the assessee appellant has raised
grievance against denial of registration u/s. 12AA of the Income Tax Act 1961,
vide order dated 28th October, 2011 passed by the learned Commissioner of
Income Tax, Faizabad.
2. When this called out for hearing, Shri
Abhinav Mehrotra, learned counsel for the assessee raised a preliminary legal
issue. He pointed out that we are at present in second round of proceedings
before this Tribunal, and that, in the first round of proceedings, matter was
remitted to the file of the learned Commissioner for fresh adjudication on
merits. It is also pointed out that even though the Tribunal had passed the
order, so remitting the matter to the file of the CIT on 12.12.2008, learned
CIT passed the order only on 28.10.2011. This inordinate delay, according to
the learned counsel, is contrary to the scheme of things visualized under the
law. Our attention was then pointed out to Special Bench decision in case of Bhagwad
Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2008] 111 ITD 175/[2007] 17 SOT
281, which is, in principle, approved by Hon'ble Jurisdictional High
Court in the case of Society for the Promotion of Education Adventure
Sport & Conservation of Environment v. CIT [2008] 171 Taxman 113 (All.).
It was thus contended that when a decision is not taken on the request for
registration u/s.12AA within a period of six months, the registration is deemed
to have been granted. By the same logic, according to the learned counsel, when
learned Commissioner does not decide the matter one way or the other within six
months even after the matter is restored to him, the registration should be
deemed to have been granted. In the present case, learned Commissioner has
taken almost three years to dispose of the remanded matter. For this short
reason alone, we are urged to grant the registration u/s. 12AA.
3. Learned Departmental Representative does
not dispute the factual elements embedded in the above contentions but submits
that it will be unrealistic to proceed on this basis due to heavy work load on
the Commissioner, and it will seriously affect legitimate interests of revenue.
We are thus urged to deal with the matter on merits.
4. In our considered view, plea of the
assessee deserves to be accepted in the light of Hon'ble jurisdictional High
Court's judgment in the case of Society for the Promotion of Education
Adventure Sport & Conservation of Environment (supra),
wherein their Lordships have, inter alia, observed as follows:—
"The apex Court has
also applied doctrine of purposive interpretation in fiscal statutes that would
be evident from its decision inCIT v. Anjum M.H.Ghaswala
& Ors. [2001] 171 CTR (SC) 1 : JT 2001 (9)
SC 61. Considering the pros and cons of the two views, we are of the
opinion that by far the better interpretation would be to hold that the effect
of non-consideration of the application for registration within the time fixed
by section 12AA(2) would be a deemed grant of registration. We do not find any
good reason to make the assessee suffer because the IT Department is not able
to keep its officers under check and control, so as to take timely decisions in
such simple matters such as consideration of applications for registration even
within the large six month period provided by s. 12AA(2) of the Act.
We accordingly direct
the respondents, subject to any order which may be passed under s. 12AA(3), to
treat the petitioner society as an institution duly approved and registered
under s. 12AA and to recomputed its income by applying the provision of s.11 of
the Act. Accordingly, a formal certificate of approval will be issued forthwith
to the petitioner by the respondent No.2."
5. Applying the principle so laid down, where
Commissioner does not pass any orders even after six months from receipt of
Tribunal's order remitting the matter to him. The registration will be deemed
to have been granted. Of course, this is subject to exercise of Commissioner's
power u/s.12AA(3) in appropriate cases, but the registration will be deemed to
have been granted.
6. For the reasons set out above, we uphold
the preliminary objection raised by the assessee and direct the Commissioner to
issue approval of registration forthwith. In this view of the matter, we see no
need to deal with other legal and factual issues raised by the assessee.
7. In the result, the appeal in ITA
No.104/Luc/2012 is allowed.
ITA No. 105/Luck/2012
By way of this appeal,
the assessee appellant has challenged denial of approval u/s. 80G of the Income
Tax Act 1961, vide learned Commissioner's order dated 28th October, 2011.
2. The short reason for denying 80G approval
was denial of registration u/s.12AA. Now that, vide our order of even date,
registration u/s.12AA is granted. The very foundation for denial of approval
u/s.80G thus ceases to hold good in law.
3. In view of the above, the order denying
approval u/s.80G is reversed. Learned CIT is directed to grant the approval.
4. In the result, this appeal in ITA
No.105/Luc/2012 is also allowed.
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